How can I get my iPhone 3GS to recognize my AT&T SIM card after upgrade to iOS 5.1?

I upgraded my previously-unlocked iPhone 3GS to iOS 5.1 today, from iOS 4. I hadn't upgraded the OS in awhile (since the phone was unlocked before a trip overseas).
iTunes says: "There is no SIM card installed in the iPhone you are attempting to activate. Please disconnect and insert a SIM card in the iPhone." I tried taking out and reinserting the SIM card, but that didn't help. It seems that I cannot restore to factory settings now, since iTunes doesn't think my phone has a SIM card and so won't connect to my phone at all.
I realize now that I should have restored to factory settings before upgrading, but given that I did not, how can I fix this retroactively?
Help?!
Thanks!

I did.
I've connected to the M-Cell for a few minutes once. It dropped the one call I tried to make, and my phone hasn't reconnectted since. My roommate has the same phone. We have the same thing happening.

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